Page 24 - Performance Leadership

Chapter 1 Setting the Scene • 13

Lastly, technology developments have increased the need for
extreme alignment. Internet technology has dramatically increased
consumer control over business processes. In many industries, mass
customization is becoming the norm. Internet applications allow cus-
tomers to configure and tailor their orders themselves and make
changes until the last possible moment. The number of configurations
for cars is endless. Consumers can visit the Web site of their insurance
company and compile their general insurance policies in a very per-
sonal and detailed way. Sports companies have built Web sites where
consumers can custom-design their own personal sport shoes in differ-
ent colors, with a personalized text woven into the leather. The cus-
tomized pairs are then produced and shipped to customers.
Pharmaceutical companies are carefully starting to talk about person-
alized medication. When consumers control the business processes,
there is no difference between front office and back office.
Information technology doesn’t support the business, IT has become
the business. Profitability and pricing is not a finance and marketing
issue, it has become an operational management issue. In environ-
ments like this, alignment cannot come from a management hierar-
chy and weekly management meetings. Business processes and
operational management need to be strongly aligned in order to man-
age this level of flexibility and speed.
Organizations that are successful with performance management
use it to create focus and alignment. Bottom-line success comes from
identifying a limited number of really important goals and going for
them. We can’t do everything because our actions would be frag-
mented or lacking in focus. We need to choose and focus. Alignment
basically means that everyone agrees on what those goals are and
understands his or her own contributions.
Best practices in performance management tell us that creating
focus and alignment is a top-down process. Senior management defines
the strategic objectives and cascades targets down the organization,
making all managers commit to those targets. But, as I described in the
introduction, an organization rarely exists where people all share the
same goals. Senior managers need to satisfy shareholders, who ask for
a financial return; middle managers try to build their career; special-
ists seek to perfect their skills—everyone has his or her own agenda.